Question about getting loans from hard money lenders and banks

Usually Hard money lenders will loan on the property because their in it for a short time,where banks are looking for your ability to make the payments overtime,so they have more concern then just credit score.

Well since Matt never went over this what are the main things you need when talking to a bank? If a bank likes what I say to them over the phone and they want to meet me in person, what do I need as a new investor to convince the bank to work for me?

The reason I'm asking because the residential loan officer asked to meet me. After I called them and asked all the questions Matt Larson put together he was more then excited to meet me.

I just don't know what to present to them other then a good credit score and a general idea of what I plan to do.

When working with a bank of course they will be looking for a good credit score, the higher the score the lower interest rate you can get. Usually you will need a 740 or higher for the best deal. They will also need income and asset documentation. That will require bank statements, tax returns, paycheck stubs, ect. The loan officer will let you know what you would need to present to them. The first meeting they should be able to get you prequalified for a certain amount by asking some general questions, and that should be your starting point with the loan officer.

Require that you have 6 months worth of payments in liquid funds. Be aware of that as well... Some more but most are that way from what I have seen.

What I have found in my research with banks is this.

If the bank sells there loans to a secondary market ( fannie mae, freddie mac) they have specific guidelines that are around the same.

If the bank does a loan in house. Which means they do not sell the loan then they will have there own criteria for the loan. You will need to speak directly and personally with the banks loan officer. You can ask what they are looking for specifically and they will tell you.

Most commonly what I have found is 680 or higher credit score. Under 35% debt to income ratio. Some what a % down on purchase other what a % down of only the rehab costs, others will ask for something different. If it is an income property then the basis for the loan is completely different. They look for how the property will qualify not necessarily you. They go by net operating income. How long the property has been producing or how long you have an agreement for along with other things.

My suggestion is to go to the bank personally. Like a credit union or a small local bank. Ask them what they need to have a property qualify and tell them what you are looking for. If they do not want to answer your question or give you the run around just follow up with them in a few weeks and show them your persistence. Get to know them and build a relationship:)

Ok guys thanks for all the info, that really helps me understand my approach more.

Here is my credit report

Experian 647 Fair Highest score
TransUnion 644 Fair Middle score
Equifax 618 Weak Lowest score

With this type of credit report will the bank still work with me?

If I were you I would go and get pre qualified with the lenders you want to use. Then when you get a deal you will know what you can do in advance!

Most HMLs look at your credit HISTORY more than your score. If you have a very strong deal that is! They check for late payments, foreclosures, repos, that type of stuff. You must have money in the bank in most cases, so most often a HML or bank loan is not a no money down strategy. (don't know if that is what you are trying to do)

Michael Mangham
MD Home Acquisitions LLC

I agree with Michael. Also go out and talk with the bank loan officers. One thing you can do is do a dry run with a bank you do not care if you get the loan from. Then after some practice you go to the bank that you realy want to work with and you will look great in thier eye. I learned that from Indiana Joe.

Steve.

Hi,this is pdawg, i was wondering how you would make an offer on a property that your planning to use private money on, would you say your offer is cash,contingent on finding a private lender? or would you not mention a private lender and say contingent on partners approval?

If I had the private money ready to go I would put in a cash offer. Cash is best.

Steve.

Would make sure your PI is in place for sure. Make sure you have escape clauses built in to your PO. I think most people know that not to many people have a bag full of money to make deals. We very rarely say I can pay you cash...Jan

Hi I a real new at this have not started anything. My question is my fiancee and I are both unemployed. we are both receiving unemployment, and I was wondering. Is there any way that we can purchase our own home without us having a job and free and clear?